Form 20-F ☑
|
Form 40-F □
|
Yes □
|
No ☑
|
EXFO INC.
|
|
By: s/ Philippe Morin
Name: Philippe Morin
Title: Chief Executive Officer
|
|
◾
|
Sales reached US$73.6 million, above midpoint of guidance range
|
◾
|
IFRS net earnings attained break-even mark, US$0.00 per share
|
◾
|
Adjusted EBITDA totaled US$7.9 million, 10.7% of sales
|
Three months
ended May 31, 2019
|
Three months
ended May 31, 2018
|
Nine months
ended May 31, 2019
|
Nine months
ended May 31, 2018
|
|||||||||||||
Test and Measurement sales
|
$
|
54,359
|
$
|
49,864
|
$
|
154,530
|
$
|
149,934
|
||||||||
Service Assurance, Systems and Services sales
|
19,469
|
22,174
|
62,586
|
49,599
|
||||||||||||
Foreign exchange gains (losses) on forward exchange contracts
|
(241
|
)
|
179
|
(401
|
)
|
797
|
||||||||||
Total sales
|
$
|
73,587
|
$
|
72,217
|
$
|
216,715
|
$
|
200,330
|
||||||||
Test and Measurement bookings
|
$
|
50,157
|
$
|
52,111
|
$
|
159,473
|
$
|
152,351
|
||||||||
Service Assurance, Systems and Services bookings
|
19,648
|
20,800
|
67,822
|
51,407
|
||||||||||||
Foreign exchange gains (losses) on forward exchange contracts
|
(241
|
)
|
179
|
(401
|
)
|
797
|
||||||||||
Total bookings
|
$
|
69,564
|
$
|
73,090
|
$
|
226,894
|
$
|
204,555
|
||||||||
Book-to-bill ratio (bookings/sales)
|
0.95
|
1.01
|
1.05
|
1.02
|
||||||||||||
Gross margin before depreciation and amortization*
|
$
|
43,129
|
$
|
43,254
|
$
|
128,298
|
$
|
122,752
|
||||||||
58.6
|
%
|
59.9
|
%
|
59.2
|
%
|
61.3
|
%
|
|||||||||
Other selected information:
|
||||||||||||||||
IFRS net earnings (loss) attributable to the parent interest
|
$
|
21
|
$
|
(5,970
|
)
|
$
|
(2,253
|
)
|
$
|
(7,951
|
)
|
|||||
Amortization of intangible assets
|
$
|
2,072
|
$
|
4,210
|
$
|
7,142
|
$
|
8,385
|
||||||||
Stock-based compensation costs
|
$
|
475
|
$
|
440
|
$
|
1,354
|
$
|
1,280
|
||||||||
Restructuring charges (reversals)
|
$
|
(13
|
)
|
$
|
–
|
$
|
3,305
|
$
|
–
|
|||||||
Change in fair value of cash contingent consideration
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
(716
|
)
|
|||||||
Acquisition-related deferred revenue fair value adjustment
|
$
|
–
|
$
|
913
|
$
|
1,435
|
$
|
1,222
|
||||||||
Net income tax effect of the above items
|
$
|
(344
|
)
|
$
|
(138
|
)
|
$
|
(1,115
|
)
|
$
|
(704
|
)
|
||||
Foreign exchange (gain) loss
|
$
|
(146
|
)
|
$
|
(160
|
)
|
$
|
55
|
$
|
(1,386
|
)
|
|||||
Adjusted EBITDA*
|
$
|
7,860
|
$
|
2,549
|
$
|
19,372
|
$
|
11,100
|
•
|
Growth. Sales increased 1.9% year-over-year despite a negative currency impact. The increase in sales can be attributed to
heightened demand for EXFO’s Test and Measurement product line, especially 100G/200G/400G optical transport solutions for communications service providers and advanced equipment for the R&D labs and factories of network equipment
manufacturers. Service Assurance, Systems and Services (SASS) sales were down year-over-year mainly due to a market slowdown to evaluate how to optimally transform network architectures into virtualized 5G infrastructures. Test and
Measurement sales accounted for 74% of total revenue in the third quarter of 2019, while SASS sales totaled 26%. Revenue breakdown among the three main selling regions amounted to
51% in the Americas, 30% in Europe, Middle East and Africa (EMEA) and 19% in Asia-Pacific (APAC).
EXFO’s top customer accounted for 6.9% of sales, while the top three represented 16.9%.
|
•
|
Profitability. IFRS net earnings attained the break-even mark in the third quarter of 2019, while adjusted EBITDA reached US$7.9
million, or 10.7% of sales. After nine months in fiscal 2019, IFRS net loss amounted to US$2.3 million while adjusted EBITDA totaled US$19.4 million.
|
•
|
Innovation. EXFO introduced a new category of fiber testing solutions with the launch of the industry’s first optical fiber
multimeter (OFM) following the quarter-end. This revolutionary test instrument, branded Optical Xplorer™, greatly simplifies and accelerates the task of frontline technicians by automatically evaluating the quality of fiber links in a
matter of seconds.
|
Three months ended
May 31, 2019
|
Three months ended
May 31, 2018
|
Nine months ended
May 31, 2019
|
Nine months ended
May 31, 2018
|
|||||||||||||
IFRS net earnings (loss) attributable to the parent interest for the period
|
$
|
21
|
$
|
(5,970
|
)
|
$
|
(2,253
|
)
|
$
|
(7,951
|
)
|
|||||
Add (deduct):
|
||||||||||||||||
Depreciation of property, plant and equipment
|
1,368
|
1,555
|
4,187
|
3,972
|
||||||||||||
Amortization of intangible assets
|
2,072
|
4,210
|
7,142
|
8,385
|
||||||||||||
Interest and other (income) expense
|
698
|
198
|
(439
|
)
|
870
|
|||||||||||
Income taxes
|
3,385
|
1,363
|
4,586
|
5,424
|
||||||||||||
Stock-based compensation costs
|
475
|
440
|
1,354
|
1,280
|
||||||||||||
Restructuring charges (reversals)
|
(13
|
)
|
–
|
3,305
|
–
|
|||||||||||
Change in fair value of cash contingent consideration
|
–
|
–
|
–
|
(716
|
)
|
|||||||||||
Acquisition-related deferred revenue fair value adjustment
|
–
|
913
|
1,435
|
1,222
|
||||||||||||
Foreign exchange (gain) loss
|
(146
|
)
|
(160
|
)
|
55
|
(1,386
|
)
|
|||||||||
Adjusted EBITDA for the period (1)
|
$
|
7,860
|
$
|
2,549
|
$
|
19,372
|
$
|
11,100
|
||||||||
Adjusted EBITDA as a percentage of sales
|
10.7
|
%
|
3.5
|
%
|
8.9
|
%
|
5.5
|
%
|
(1)
|
Includes acquisition-related costs of US$2.1 million for the nine months ended May 31, 2018 (nil in fiscal 2019).
|
As at
May 31,
2019
|
As at
August 31,
2018
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash
|
$
|
13,623
|
$
|
12,758
|
||||
Short-term investments
|
1,691
|
2,282
|
||||||
Accounts receivable
|
||||||||
Trade
|
52,876
|
47,273
|
||||||
Other
|
3,384
|
4,137
|
||||||
Income taxes and tax credits recoverable
|
2,985
|
4,790
|
||||||
Inventories
|
37,859
|
38,589
|
||||||
Prepaid expenses
|
5,492
|
5,291
|
||||||
Other assets
|
2,945
|
2,279
|
||||||
120,855
|
117,399
|
|||||||
Tax credits recoverable
|
46,271
|
47,677
|
||||||
Property, plant and equipment
|
40,509
|
44,310
|
||||||
Intangible assets
|
22,875
|
29,866
|
||||||
Goodwill
|
38,517
|
39,892
|
||||||
Deferred income tax assets
|
5,229
|
4,714
|
||||||
Other assets
|
911
|
686
|
||||||
$
|
275,167
|
$
|
284,544
|
|||||
Liabilities
|
||||||||
Current liabilities
|
||||||||
Bank loan
|
$
|
5,000
|
$
|
10,692
|
||||
Accounts payable and accrued liabilities
|
48,903
|
47,898
|
||||||
Provisions
|
1,181
|
2,954
|
||||||
Income taxes payable
|
1,040
|
873
|
||||||
Deferred revenue
|
24,943
|
16,556
|
||||||
Other liabilities
|
1,624
|
3,197
|
||||||
Current portion of long-term debt (note 5)
|
2,579
|
2,921
|
||||||
85,270
|
85,091
|
|||||||
Provisions
|
2,830
|
2,347
|
||||||
Deferred revenue
|
9,086
|
6,947
|
||||||
Long-term debt (note 5)
|
3,876
|
5,907
|
||||||
Deferred income tax liabilities
|
3,638
|
5,910
|
||||||
Other liabilities
|
625
|
421
|
||||||
105,325
|
106,623
|
|||||||
Shareholders’ equity
|
||||||||
Share capital (note 6)
|
92,889
|
91,937
|
||||||
Contributed surplus
|
18,734
|
18,428
|
||||||
Retained earnings
|
112,400
|
114,906
|
||||||
Accumulated other comprehensive loss
|
(54,181
|
)
|
(47,350
|
)
|
||||
169,842
|
177,921
|
|||||||
$
|
275,167
|
$
|
284,544
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Sales
|
$
|
73,587
|
$
|
216,715
|
$
|
72,217
|
$
|
200,330
|
||||||||
Cost of sales (1)
|
30,458
|
88,417
|
28,963
|
77,578
|
||||||||||||
Selling and administrative
|
23,761
|
75,610
|
25,957
|
74,066
|
||||||||||||
Net research and development
|
11,970
|
39,410
|
16,101
|
40,440
|
||||||||||||
Depreciation of property, plant and equipment
|
1,368
|
4,187
|
1,555
|
3,972
|
||||||||||||
Amortization of intangible assets
|
2,072
|
7,142
|
4,210
|
8,385
|
||||||||||||
Change in fair value of cash contingent consideration
|
‒
|
‒
|
‒
|
(716
|
)
|
|||||||||||
Interest and other (income) expense (note 3)
|
698
|
(439
|
)
|
198
|
870
|
|||||||||||
Foreign exchange (gain) loss
|
(146
|
)
|
55
|
(160
|
)
|
(1,386
|
)
|
|||||||||
Share in net loss of an associate
|
‒
|
‒
|
‒
|
2,080
|
||||||||||||
Gain on the deemed disposal of the investment in an associate
|
‒
|
‒
|
‒
|
(2,080
|
)
|
|||||||||||
Earnings (loss) before income taxes
|
3,406
|
2,333
|
(4,607
|
)
|
(2,879
|
)
|
||||||||||
Income taxes (notes 3 and 8)
|
3,385
|
4,586
|
1,363
|
5,424
|
||||||||||||
Net earnings (loss) for the period
|
21
|
(2,253
|
)
|
(5,970
|
)
|
(8,303
|
)
|
|||||||||
Net loss for the period attributable to non-controlling interest
|
‒
|
‒
|
‒
|
(352
|
)
|
|||||||||||
Net earnings (loss) for the period attributable to parent interest
|
$
|
21
|
$
|
(2,253
|
)
|
$
|
(5,970
|
)
|
$
|
(7,951
|
)
|
|||||
Basic and diluted net earnings (loss) attributable to parent interest per share
|
$
|
0.00
|
$
|
(0.04
|
)
|
$
|
(0.11
|
)
|
$
|
(0.14
|
)
|
|||||
Basic weighted average number of shares outstanding (000’s)
|
55,392
|
55,306
|
55,099
|
54,959
|
||||||||||||
Diluted weighted average number of shares outstanding (000’s) (note 9)
|
56,437
|
55,306
|
55,099
|
54,959
|
(1)
|
The cost of sales is exclusive of depreciation and amortization, shown separately.
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Net earnings (loss) for the period
|
$
|
21
|
$
|
(2,253
|
)
|
$
|
(5,970
|
)
|
$
|
(8,303
|
)
|
|||||
Other comprehensive income (loss), net of income taxes
|
||||||||||||||||
Items that may be reclassified subsequently to net earnings
|
||||||||||||||||
Foreign currency translation adjustment
|
(4,611
|
)
|
(6,160
|
)
|
(3,189
|
)
|
(5,033
|
)
|
||||||||
Unrealized gains/losses on forward exchange contracts
|
(1,046
|
)
|
(1,237
|
)
|
(486
|
)
|
(971
|
)
|
||||||||
Reclassification of realized gains/losses on forward exchange contracts in net earnings
|
(91
|
)
|
210
|
(232
|
)
|
(840
|
)
|
|||||||||
Deferred income taxes on gains/losses on forward exchange contracts
|
314
|
356
|
155
|
418
|
||||||||||||
Other comprehensive loss
|
(5,434
|
)
|
(6,831
|
)
|
(3,752
|
)
|
(6,426
|
)
|
||||||||
Comprehensive loss for the period
|
(5,413
|
)
|
(9,084
|
)
|
(9,722
|
)
|
(14,729
|
)
|
||||||||
Comprehensive loss for the period attributable to non-controlling interest
|
‒
|
‒
|
‒
|
(352
|
)
|
|||||||||||
Comprehensive loss for the period attributable to parent interest
|
$
|
(5,413
|
)
|
$
|
(9,084
|
)
|
$
|
(9,722
|
)
|
$
|
(14,377
|
)
|
Nine months ended May 31, 2018
|
||||||||||||||||||||||||
Share
capital
|
Contributed surplus
|
Retained earnings
|
Accumulated other comprehensive loss
|
Non-controlling interest
|
Total
shareholders’ equity
|
|||||||||||||||||||
Balance as at September 1, 2017
|
$
|
90,411
|
$
|
18,184
|
$
|
127,160
|
$
|
(38,965
|
)
|
$
|
‒ |
$
|
196,790
|
|||||||||||
Reclassification of stock-based compensation costs (note 6)
|
1,499
|
(1,499
|
)
|
‒
|
‒
|
‒
|
‒
|
|||||||||||||||||
Stock-based compensation costs
|
‒
|
1,322
|
‒
|
‒
|
‒
|
1,322
|
||||||||||||||||||
Business combination
|
‒
|
‒
|
‒
|
‒
|
(3,662
|
)
|
(3,662
|
)
|
||||||||||||||||
Acquisition of non-controlling interest
|
‒
|
‒
|
(352
|
)
|
‒
|
4,014
|
3,662
|
|||||||||||||||||
Net loss for the period
|
‒
|
‒
|
(7,951
|
)
|
‒
|
(352
|
)
|
(8,303
|
)
|
|||||||||||||||
Other comprehensive loss
|
||||||||||||||||||||||||
Foreign currency translation adjustment
|
‒
|
‒
|
‒
|
(5,033
|
)
|
‒
|
(5,033
|
)
|
||||||||||||||||
Changes in unrealized gains/losses on forward exchange contracts, net of deferred income taxes of $418
|
‒
|
‒
|
‒
|
(1,393
|
)
|
‒
|
(1,393
|
)
|
||||||||||||||||
Comprehensive loss for the period
|
(14,729
|
)
|
||||||||||||||||||||||
Balance as at May 31, 2018
|
$
|
91,910
|
$
|
18,007
|
$
|
118,857
|
$
|
(45,391
|
)
|
$
|
‒ |
$
|
183,383
|
Nine months ended May 31, 2019
|
||||||||||||||||||||
Share
capital
|
Contributed surplus
|
Retained earnings
|
Accumulated other comprehensive loss
|
Total
shareholders’ equity
|
||||||||||||||||
Balance as at September 1, 2018
|
$
|
91,937
|
$
|
18,428
|
$
|
114,906
|
$
|
(47,350
|
)
|
$
|
177,921
|
|||||||||
Adoption of IFRS 9 (note 2)
|
‒
|
‒
|
(253
|
)
|
‒
|
(253
|
)
|
|||||||||||||
Adjusted balance as at September 1, 2018
|
91,937
|
18,428
|
114,653
|
(47,350
|
)
|
177,668
|
||||||||||||||
Reclassification of stock-based compensation costs (note 6)
|
1,078
|
(1,078
|
)
|
‒
|
‒
|
‒
|
||||||||||||||
Redemption of share capital (note 6)
|
(126
|
)
|
21
|
‒
|
‒
|
(105
|
)
|
|||||||||||||
Stock-based compensation costs
|
‒
|
1,363
|
‒
|
‒
|
1,363
|
|||||||||||||||
Net loss for the period
|
‒
|
‒
|
(2,253
|
)
|
‒
|
(2,253
|
)
|
|||||||||||||
Other comprehensive loss
|
||||||||||||||||||||
Foreign currency translation adjustment
|
‒
|
‒
|
‒
|
(6,160
|
)
|
(6,160
|
)
|
|||||||||||||
Changes in unrealized gains/losses on forward exchange contracts, net of deferred income taxes of $356
|
‒
|
‒
|
‒
|
(671
|
)
|
(671
|
)
|
|||||||||||||
Total comprehensive loss for the period
|
(9,084
|
)
|
||||||||||||||||||
Balance as at May 31, 2019
|
$
|
92,889
|
$
|
18,734
|
$
|
112,400
|
$
|
(54,181
|
)
|
$
|
169,842
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Cash flows from operating activities
|
||||||||||||||||
Net earnings (loss) for the period
|
$
|
21
|
$
|
(2,253
|
)
|
$
|
(5,970
|
)
|
$
|
(8,303
|
)
|
|||||
Add (deduct) items not affecting cash
|
||||||||||||||||
Stock-based compensation costs
|
475
|
1,354
|
440
|
1,280
|
||||||||||||
Depreciation and amortization
|
3,440
|
11,329
|
5,765
|
12,357
|
||||||||||||
Gain on disposal of capital assets (note 3)
|
‒
|
(1,732
|
)
|
‒
|
‒
|
|||||||||||
Write-off of capital assets
|
‒
|
261
|
77
|
325
|
||||||||||||
Change in fair value of cash contingent consideration
|
‒
|
‒
|
‒
|
(716
|
)
|
|||||||||||
Deferred revenue
|
1,676
|
11,619
|
(552
|
)
|
1,682
|
|||||||||||
Deferred income taxes
|
(142
|
)
|
(2,295
|
)
|
389
|
2,533
|
||||||||||
Share in net loss of an associate
|
‒
|
‒
|
‒
|
2,080
|
||||||||||||
Gain on deemed disposal of the investment in an associate
|
‒
|
‒
|
‒
|
(2,080
|
)
|
|||||||||||
Changes in foreign exchange gain/loss
|
143
|
(310
|
)
|
(603
|
)
|
(239
|
)
|
|||||||||
5,613
|
17,973
|
(454
|
)
|
8,919
|
||||||||||||
Changes in non-cash operating items
|
||||||||||||||||
Accounts receivable
|
(12,857
|
)
|
(7,038
|
)
|
2,353
|
7,693
|
||||||||||
Income taxes and tax credits
|
1,596
|
1,629
|
172
|
(2,787
|
)
|
|||||||||||
Inventories
|
(306
|
)
|
(668
|
)
|
1,162
|
(12
|
)
|
|||||||||
Prepaid expenses
|
(585
|
)
|
(380
|
)
|
16
|
205
|
||||||||||
Other assets
|
(664
|
)
|
(1,003
|
)
|
(245
|
)
|
(769
|
)
|
||||||||
Accounts payable, accrued liabilities and provisions
|
1,995
|
2,013
|
1,821
|
5
|
||||||||||||
Other liabilities
|
(6
|
)
|
(1,527
|
)
|
(109
|
)
|
101
|
|||||||||
(5,214
|
)
|
10,999
|
4,716
|
13,355
|
||||||||||||
Cash flows from investing activities
|
||||||||||||||||
Additions to short-term investments
|
(286
|
)
|
(578
|
)
|
‒
|
(482
|
)
|
|||||||||
Proceeds from disposal of short-term investments
|
826
|
1,168
|
‒
|
234
|
||||||||||||
Purchases of capital assets
|
(1,639
|
)
|
(6,318
|
)
|
(3,431
|
)
|
(7,680
|
)
|
||||||||
Proceeds from disposal of capital assets (note 3)
|
‒
|
3,318
|
‒
|
‒
|
||||||||||||
Investment in an associate
|
‒
|
‒
|
‒
|
(12,530
|
)
|
|||||||||||
Business combinations, net of cash acquired
|
‒
|
‒
|
‒
|
(19,120
|
)
|
|||||||||||
(1,099
|
)
|
(2,410
|
)
|
(3,431
|
)
|
(39,578
|
)
|
|||||||||
Cash flows from financing activities
|
||||||||||||||||
Bank loan
|
(3,808
|
)
|
(5,052
|
)
|
9,184
|
11,250
|
||||||||||
Repayment of long-term debt
|
(713
|
)
|
(2,165
|
)
|
(757
|
)
|
(1,027
|
)
|
||||||||
Redemption of share capital (note 6)
|
‒
|
(105
|
)
|
‒
|
‒
|
|||||||||||
Acquisition of non-controlling interest
|
‒
|
‒
|
(3,657
|
)
|
(3,657
|
)
|
||||||||||
(4,521
|
)
|
(7,322
|
)
|
4,770
|
6,566
|
|||||||||||
Effect of foreign exchange rate changes on cash
|
(306
|
)
|
(402
|
)
|
(119
|
)
|
(289
|
)
|
||||||||
Change in cash during the period
|
(11,140
|
)
|
865
|
5,936
|
(19,946
|
)
|
||||||||||
Cash – Beginning of the period
|
24,763
|
12,758
|
12,553
|
38,435
|
||||||||||||
Cash – End of the period
|
$
|
13,623
|
$
|
13,623
|
$
|
18,489
|
$
|
18,489
|
||||||||
Supplementary information
|
||||||||||||||||
Income taxes paid
|
$
|
391
|
$
|
1,877
|
$
|
426
|
$
|
1,695
|
||||||||
Additions to capital assets
|
$
|
1,898
|
$
|
5,269
|
$
|
3,371
|
$
|
8,959
|
1
|
Nature of Activities and Incorporation
|
2
|
Basis of Presentation
|
As reported
as at August 31, 2018
|
Adjustments
|
As adjusted
as at September 1, 2018
|
||||||||||
Accounts receivable – Trade
|
$
|
47,273
|
$
|
(303
|
)
|
$
|
46,970
|
|||||
Income taxes recoverable
|
$
|
4,790
|
$
|
50
|
$
|
4,840
|
||||||
Total assets
|
$
|
284,544
|
$
|
(253
|
)
|
$
|
284,291
|
|||||
Retained earnings
|
$
|
114,906
|
$
|
(253
|
)
|
$
|
114,653
|
|||||
Shareholders’ equity
|
$
|
177,921
|
$
|
(253
|
)
|
$
|
177,668
|
Financial assets
|
Classification – IAS 39
|
Classification – IFRS 9
|
Cash
|
Loans and receivables
|
Amortized cost
|
Short-term investments
|
Available for sale
|
Fair value through other comprehensive income
|
Accounts receivable
|
Loans and receivables
|
Amortized cost
|
Other assets
|
Loans and receivables
|
Amortized cost
|
Forward exchange contracts
|
Derivatives used for hedging
|
Derivatives used for hedging
|
Bank loan
|
Other financial liabilities
|
Amortized cost
|
Accounts payable and accrued liabilities
|
Other financial liabilities
|
Amortized cost
|
Other liabilities
|
Other financial liabilities
|
Amortized cost
|
Long-term debt
|
Other financial liabilities
|
Amortized cost
|
Forward exchange contracts
|
Derivatives used for hedging
|
Derivatives used for hedging
|
3
|
Restructuring Charges
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
|||||||
Balance – Beginning of the period
|
$
|
1,795
|
$
|
3,167
|
||||
Additions and reversals (note 7)
|
(13
|
)
|
3,305
|
|||||
Payments
|
(357
|
)
|
(5,047
|
)
|
||||
Balance – End of the period
|
$
|
1,425
|
$
|
1,425
|
4
|
Financial Instruments
|
Level 1: |
Quoted prices (unadjusted) in active markets for identical assets or liabilities
|
Level 2: |
Inputs other than quoted prices included within Level 1 that are observable for the asset and liability, either directly or indirectly
|
Level 3: |
Unobservable inputs for the asset or liability
|
As at May 31, 2019
|
As at August 31, 2018
|
|||||||||||||||
Level 1
|
Level 2
|
Level 1
|
Level 2
|
|||||||||||||
Financial assets
|
||||||||||||||||
Short-term investments
|
$
|
1,691
|
$
|
− |
$
|
2,282
|
$
|
− | ||||||||
Forward exchange contracts
|
$
|
−
|
$
|
33
|
$
|
− |
$
|
318
|
||||||||
Financial liabilities
|
||||||||||||||||
Forward exchange contracts
|
$
|
−
|
$
|
1,837
|
$
|
− |
$
|
807
|
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual forward rates
|
|||||||
June 2019 to August 2019
|
$
|
8,700
|
1.2984
|
||||||
September 2019 to August 2020
|
33,600
|
1.3001
|
|||||||
September 2020 to August 2021
|
15,300
|
1.3067
|
|||||||
September 2021 to April 2022
|
4,500
|
1.3208
|
|||||||
Total
|
$
|
62,100
|
1.3030
|
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual forward rates
|
|||||||
June 2019 to August 2019
|
600
|
74.31
|
|||||||
September 2019 to May 2020
|
1,200
|
72.00
|
|||||||
Total
|
$
|
1,800
|
72.77
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Gains (losses) on forward exchange contracts
|
$
|
(241
|
)
|
$
|
(401
|
)
|
$
|
179
|
$
|
797
|
5
|
Long-term Debt
|
As at
May 31,
2019
|
As at
August 31,
2018
|
|||||||
Unsecured, non-interest-bearing loans, denominated in euros, repayable in quarterly instalments,
maturing in March 2024 and March 2025
|
$
|
895
|
$
|
883
|
||||
Unsecured loans, denominated in euros, repayable in monthly, quarterly
or bi-annual instalments, bearing interest at annual rates of nil to 5.0%, maturing at different dates between March 2020 and September 2023 |
3,471
|
4,853
|
||||||
Loans, secured by the universality of the assets of a subsidiary, denominated in euros, repayable
in monthly instalments, bearing interest at annual rates of 0.7% to 2.0%, maturing at different dates between June 2019 and August 2022
|
533
|
828
|
||||||
Loans, secured by the universality of the assets of a subsidiary, denominated in euros, repayable
in monthly or quarterly instalments, bearing interest at annual rates of 1.1% to 2.9%, maturing at different dates between March 2020 and July 2022
|
1,556
|
2,264
|
||||||
6,455
|
8,828
|
|||||||
Current portion of long-term debt
|
2,579
|
2,921
|
||||||
$
|
3,876
|
$
|
5,907
|
As at
May 31,
2019
|
As at
August 31,
2018
|
|||||||
No later than one year
|
$
|
2,579
|
$
|
2,921
|
||||
Later than one year and no later than five years
|
3,774
|
5,745
|
||||||
Later than five years
|
102
|
162
|
||||||
$
|
6,455
|
$
|
8,828
|
6
|
Share Capital
|
Nine months ended May 31, 2018
|
||||||||||||||||||||
Multiple voting shares
|
Subordinate voting shares
|
|||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Total
amount
|
||||||||||||||||
Balance as at September 1, 2017
|
31,643,000
|
$
|
1
|
23,068,777
|
$
|
90,410
|
$
|
90,411
|
||||||||||||
Redemption of restricted share units
|
−
|
−
|
155,619
|
−
|
−
|
|||||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
−
|
−
|
−
|
598
|
598
|
|||||||||||||||
Balance as at November 30, 2017
|
31,643,000
|
1
|
23,224,396
|
91,008
|
91,009
|
|||||||||||||||
Redemption of restricted share units
|
−
|
−
|
182,725
|
−
|
−
|
|||||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
−
|
−
|
−
|
675
|
675
|
|||||||||||||||
Balance as at February 28, 2018
|
31,643,000
|
1
|
23,407,121
|
91,683
|
91,684
|
|||||||||||||||
Redemption of restricted share units
|
−
|
−
|
58,335
|
−
|
−
|
|||||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
−
|
−
|
−
|
226
|
226
|
|||||||||||||||
Balance as at May 31, 2018
|
31,643,000
|
$
|
1
|
23,465,456
|
$
|
91,909
|
$
|
91,910
|
Nine months ended May 31, 2019
|
||||||||||||||||||||
Multiple voting shares
|
Subordinate voting shares
|
|||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Total
amount
|
||||||||||||||||
Balance as at September 1, 2018
|
31,643,000
|
$
|
1
|
23,472,995
|
$
|
91,936
|
$
|
91,937
|
||||||||||||
Redemption of restricted share units
|
−
|
−
|
176,729
|
−
|
−
|
|||||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
−
|
−
|
−
|
643
|
643
|
|||||||||||||||
Balance as at November 30, 2018
|
31,643,000
|
1
|
23,649,724
|
92,579
|
92,580
|
|||||||||||||||
Redemption of restricted share units
|
−
|
−
|
129,571
|
−
|
−
|
|||||||||||||||
Redemption of share capital
|
−
|
−
|
(32,232
|
)
|
(126
|
)
|
(126
|
)
|
||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
−
|
−
|
−
|
424
|
424
|
|||||||||||||||
Balance as at February 28, 2019
|
31,643,000
|
1
|
23,747,063
|
92,877
|
92,878
|
|||||||||||||||
Redemption of restricted share units
|
−
|
−
|
2,856
|
−
|
−
|
|||||||||||||||
Reclassification of stock-based compensation costs to share capital upon exercise of stock awards
|
−
|
−
|
−
|
11
|
11
|
|||||||||||||||
Balance as at May 31, 2019
|
31,643,000
|
$
|
1
|
23,749,919
|
$
|
92,888
|
$
|
92,889
|
7
|
Statements of Earnings
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Test and measurement
|
$
|
54,359
|
$
|
154,530
|
$
|
49,864
|
$
|
149,934
|
||||||||
Service assurance, systems and services
|
19,469
|
62,586
|
22,174
|
49,599
|
||||||||||||
Foreign exchange gains (losses) on forward exchange contracts
|
(241
|
)
|
(401
|
)
|
179
|
797
|
||||||||||
Total sales for the period
|
$
|
73,587
|
$
|
216,715
|
$
|
72,217
|
$
|
200,330
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Gross research and development expenses
|
$
|
13,901
|
$
|
45,283
|
$
|
18,393
|
$
|
46,636
|
||||||||
Research and development tax credits
|
(1,931
|
)
|
(5,873
|
)
|
(2,292
|
)
|
(6,196
|
)
|
||||||||
Net research and development expenses for the period
|
$
|
11,970
|
$
|
39,410
|
$
|
16,101
|
$
|
40,440
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
||||||||||
Inventory write-down for the period
|
$
|
390
|
$
|
2,338
|
$
|
681
|
$
|
1,950
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Cost of sales
|
||||||||||||||||
Depreciation of property, plant and equipment
|
$
|
462
|
$
|
1,422
|
$
|
583
|
$
|
1,521
|
||||||||
Amortization of intangible assets
|
1,665
|
5,710
|
3,879
|
7,606
|
||||||||||||
2,127
|
7,132
|
4,462
|
9,127
|
|||||||||||||
Selling and administrative expenses
|
||||||||||||||||
Depreciation of property, plant and equipment
|
371
|
1,077
|
280
|
647
|
||||||||||||
Amortization of intangible assets
|
236
|
869
|
174
|
421
|
||||||||||||
607
|
1,946
|
454
|
1,068
|
|||||||||||||
Net research and development expenses
|
||||||||||||||||
Depreciation of property, plant and equipment
|
535
|
1,688
|
692
|
1,804
|
||||||||||||
Amortization of intangible assets
|
171
|
563
|
157
|
358
|
||||||||||||
706
|
2,251
|
849
|
2,162
|
|||||||||||||
$
|
3,440
|
$
|
11,329
|
$
|
5,765
|
$
|
12,357
|
|||||||||
Depreciation of property, plant and equipment
|
$
|
1,368
|
$
|
4,187
|
$
|
1,555
|
$
|
3,972
|
||||||||
Amortization of intangible assets
|
2,072
|
7,142
|
4,210
|
8,385
|
||||||||||||
Total depreciation and amortization expenses for the period
|
$
|
3,440
|
$
|
11,329
|
$
|
5,765
|
$
|
12,357
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Salaries and benefits
|
$
|
33,742
|
$
|
104,589
|
$
|
38,699
|
$
|
101,848
|
||||||||
Restructuring charges
|
67
|
2,800
|
−
|
−
|
||||||||||||
Stock-based compensation costs
|
475
|
1,354
|
440
|
1,280
|
||||||||||||
Total employee compensation for the period
|
$
|
34,284
|
$
|
108,743
|
$
|
39,139
|
$
|
103,128
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Cost of sales
|
$
|
36
|
$
|
107
|
$
|
36
|
$
|
107
|
||||||||
Selling and administrative expenses
|
350
|
1,015
|
297
|
882
|
||||||||||||
Net research and development expenses
|
89
|
232
|
107
|
291
|
||||||||||||
Total stock-based compensation for the period
|
$
|
475
|
$
|
1,354
|
$
|
440
|
$
|
1,280
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Cost of sales
|
$
|
‒
|
$
|
304
|
$
|
‒ |
$
|
‒ | ||||||||
Selling and administrative expenses
|
‒
|
495
|
‒
|
‒
|
||||||||||||
Net research and development expenses
|
(13
|
)
|
2,506
|
‒
|
‒
|
|||||||||||
Income taxes
|
(21
|
)
|
(63
|
)
|
‒
|
‒
|
||||||||||
Total restructuring charges for the period
|
$
|
(34
|
)
|
$
|
3,242
|
$
|
‒ |
$
|
‒ | |||||||
8
|
Income Taxes
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Income tax provision (recovery) at combined Canadian federal and provincial statutory tax rate (27%)
|
$
|
920
|
$
|
630
|
$
|
(1,244
|
)
|
$
|
(777
|
)
|
||||||
Increase (decrease) due to:
|
||||||||||||||||
Foreign income taxed at different rates
|
248
|
236
|
44
|
(26
|
)
|
|||||||||||
Non-deductible loss (non-taxable income)
|
46
|
79
|
147
|
(60
|
)
|
|||||||||||
Non-deductible expenses
|
174
|
425
|
239
|
1,189
|
||||||||||||
Change in tax rates
|
‒
|
‒
|
‒
|
167
|
||||||||||||
Effect of the US tax reform
|
‒
|
‒
|
‒
|
1,528
|
||||||||||||
Foreign exchange effect of translation of foreign subsidiaries in the functional currency
|
(100
|
)
|
(384
|
)
|
(131
|
)
|
(366
|
)
|
||||||||
Recognition of previously unrecognized deferred income tax assets (note 3)
|
‒
|
(2,383
|
)
|
‒
|
‒
|
|||||||||||
Utilization of previously unrecognized deferred income tax assets
|
333
|
(58
|
)
|
(112
|
)
|
(394
|
)
|
|||||||||
Unrecognized deferred income tax assets on temporary deductible differences and unused tax losses
|
1,442
|
4,797
|
2,411
|
4,744
|
||||||||||||
Other
|
322
|
1,244
|
9
|
(581
|
)
|
|||||||||||
Income tax provision for the period
|
$
|
3,385
|
$
|
4,586
|
$
|
1,363
|
$
|
5,424
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Current
|
$
|
3,527
|
$
|
6,881
|
$
|
974
|
$
|
2,891
|
||||||||
Deferred
|
(142
|
)
|
(2,295
|
)
|
389
|
2,533
|
||||||||||
$
|
3,385
|
$
|
4,586
|
$
|
1,363
|
$
|
5,424
|
9
|
Earnings per Share
|
Three months
ended
May 31, 2019
|
Nine months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Basic weighted average number of shares outstanding (000’s)
|
55,392
|
55,306
|
55,099
|
54,959
|
||||||||||||
Plus dilutive effect of (000’s):
|
||||||||||||||||
Restricted share units
|
826
|
–
|
–
|
–
|
||||||||||||
Deferred share units
|
219
|
–
|
–
|
–
|
||||||||||||
Diluted weighted average number of shares outstanding (000’s)
|
56,437
|
55,306
|
55,099
|
54,959
|
||||||||||||
Stock awards excluded from the calculation of diluted weighted average number of shares because their exercise price was
greater than the average market price of the common shares, or their inclusion would be antidilutive (000’s)
|
1,706
|
1,698
|
1,796
|
1,802
|
Three months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2019
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Sales
|
$
|
73,587
|
$
|
72,217
|
$
|
216,715
|
$
|
200,330
|
||||||||
Cost of sales (1)
|
30,458
|
28,963
|
88,417
|
77,578
|
||||||||||||
Selling and administrative
|
23,761
|
25,957
|
75,610
|
74,066
|
||||||||||||
Net research and development
|
11,970
|
16,101
|
39,410
|
40,440
|
||||||||||||
Depreciation of property, plant and equipment
|
1,368
|
1,555
|
4,187
|
3,972
|
||||||||||||
Amortization of intangible assets
|
2,072
|
4,210
|
7,142
|
8,385
|
||||||||||||
Change in fair value of cash contingent consideration
|
–
|
–
|
–
|
(716
|
)
|
|||||||||||
Interest and other (income) expense
|
698
|
198
|
(439
|
)
|
870
|
|||||||||||
Foreign exchange (gain) loss
|
(146
|
)
|
(160
|
)
|
55
|
(1,386
|
)
|
|||||||||
Share in net loss of an associate
|
–
|
–
|
–
|
2,080
|
||||||||||||
Gain on the deemed disposal of the investment in an associate
|
–
|
–
|
–
|
(2,080
|
)
|
|||||||||||
Earnings (loss) before income taxes
|
3,406
|
(4,607
|
)
|
2,333
|
(2,879
|
)
|
||||||||||
Income taxes
|
3,385
|
1,363
|
4,586
|
5,424
|
||||||||||||
Net earnings (loss) for the period
|
21
|
(5,970
|
)
|
(2,253
|
)
|
(8,303
|
)
|
|||||||||
Net loss for the period attributable to non-controlling interest
|
–
|
–
|
–
|
(352
|
)
|
|||||||||||
Net earnings (loss) for the period attributable to parent interest
|
$
|
21
|
$
|
(5,970
|
)
|
$
|
(2,253
|
)
|
$
|
(7,951
|
)
|
|||||
Basic and diluted net earnings (loss) attributable to parent interest per share
|
$
|
0.00
|
$
|
(0.11
|
)
|
$
|
(0.04
|
)
|
$
|
(0.14
|
)
|
|||||
Other selected information:
|
||||||||||||||||
Gross margin before depreciation and amortization (2)
|
$
|
43,129
|
$
|
43,254
|
$
|
128,298
|
$
|
122,752
|
||||||||
Research and development:
|
||||||||||||||||
Gross research and development
|
$
|
13,901
|
$
|
18,393
|
$
|
45,283
|
$
|
46,636
|
||||||||
Net research and development
|
$
|
11,970
|
$
|
16,101
|
$
|
39,410
|
$
|
40,440
|
||||||||
Adjusted EBITDA (2)(3)
|
$
|
7,860
|
$
|
2,549
|
$
|
19,372
|
$
|
11,100
|
||||||||
(1)
|
The cost of sales is exclusive of depreciation and amortization, shown separately.
|
(2)
|
Refer to page 45 for non-IFRS measures.
|
(3)
|
Includes acquisition-related costs of $2.1 million for the nine months ended May 31, 2018 (nil in fiscal 2019).
|
Three months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2019
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Cost of sales (1)
|
41.4
|
40.1
|
40.8
|
38.7
|
||||||||||||
Selling and administrative
|
32.3
|
35.9
|
34.9
|
37.0
|
||||||||||||
Net research and development
|
16.3
|
22.3
|
18.2
|
20.2
|
||||||||||||
Depreciation of property, plant and equipment
|
1.9
|
2.2
|
1.9
|
2.0
|
||||||||||||
Amortization of intangible assets
|
2.8
|
5.8
|
3.3
|
4.2
|
||||||||||||
Change in fair value of cash contingent consideration
|
–
|
–
|
–
|
(0.4
|
)
|
|||||||||||
Interest and other (income) expense
|
0.9
|
0.3
|
(0.2
|
)
|
0.4
|
|||||||||||
Foreign exchange (gain) loss
|
(0.2
|
)
|
(0.2
|
)
|
–
|
(0.7
|
)
|
|||||||||
Share in net loss of an associate
|
–
|
–
|
–
|
1.0
|
||||||||||||
Gain on the deemed disposal of the investment in an associate
|
–
|
–
|
–
|
(1.0
|
)
|
|||||||||||
Earnings (loss) before income taxes
|
4.6
|
(6.4
|
)
|
1.1
|
(1.4
|
)
|
||||||||||
Income taxes
|
4.6
|
1.9
|
2.1
|
2.7
|
||||||||||||
Net earnings (loss) for the period
|
– |
(8.3
|
)
|
(1.0
|
)
|
(4.1
|
)
|
|||||||||
Net loss for the period attributable to non-controlling interest
|
–
|
–
|
–
|
(0.1
|
)
|
|||||||||||
Net earnings (loss) for the period attributable to parent interest
|
–
|
%
|
(8.3
|
)%
|
(1.0
|
)%
|
(4.0
|
)%
|
||||||||
Other selected information:
|
||||||||||||||||
Gross margin before depreciation and amortization (2)
|
58.6
|
%
|
59.9
|
%
|
59.2
|
%
|
61.3
|
%
|
||||||||
Research and development:
|
||||||||||||||||
Gross research and development
|
18.9
|
%
|
25.5
|
%
|
20.9
|
%
|
23.3
|
%
|
||||||||
Net research and development
|
16.3
|
%
|
22.3
|
%
|
18.2
|
%
|
20.2
|
%
|
||||||||
Adjusted EBITDA (2)(3)
|
10.7
|
%
|
3.5
|
%
|
8.9
|
%
|
5.5
|
%
|
(1)
|
The cost of sales is exclusive of depreciation and amortization, shown separately.
|
(2)
|
Refer to page 45 for non-IFRS measures.
|
(3)
|
Includes acquisition-related costs of 1.0% of sales for the nine months ended May 31, 2018 (nil in fiscal 2019).
|
Three months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2019
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Test and measurement
|
$
|
54,359
|
$
|
49,864
|
$
|
154,530
|
$
|
149,934
|
||||||||
Service assurance, systems and services
|
19,469
|
22,174
|
62,586
|
49,599
|
||||||||||||
73,828
|
72,038
|
217,116
|
199,533
|
|||||||||||||
Foreign exchange gains (losses) on forward exchange contracts
|
(241
|
)
|
179
|
(401
|
)
|
797
|
||||||||||
Total sales
|
$
|
73,587
|
$
|
72,217
|
$
|
216,715
|
$
|
200,330
|
Three months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2019
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Test and measurement
|
$
|
50,157
|
$
|
52,111
|
$
|
159,473
|
$
|
152,351
|
||||||||
Service assurance, systems and services
|
19,648
|
20,800
|
67,822
|
51,407
|
||||||||||||
69,805
|
72,911
|
227,295
|
203,758
|
|||||||||||||
Foreign exchange gains (losses) on forward exchange contracts
|
(241
|
)
|
179
|
(401
|
)
|
797
|
||||||||||
Total bookings
|
$
|
69,564
|
$
|
73,090
|
$
|
226,894
|
$
|
204,555
|
Three months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2019
|
Nine months
ended
May 31, 2018
|
|||||||||||||
Americas
|
51
|
%
|
49
|
%
|
51
|
%
|
50
|
%
|
||||||||
Europe, Middle East and Africa (EMEA)
|
30
|
35
|
32
|
31
|
||||||||||||
Asia-Pacific (APAC)
|
19
|
16
|
17
|
19
|
||||||||||||
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(1)
|
Refer to page 47 for quarterly sales by product line for fiscal 2018.
|
Cash flows used by operating activities
|
$
|
(5,214
|
)
|
|
Decrease in bank loan
|
(3,808
|
)
|
||
Purchases of capital assets
|
(1,639
|
)
|
||
Repayment of long-term debt
|
(713
|
)
|
||
Unrealized foreign exchange loss on cash and short-term investments
|
(313
|
)
|
||
$
|
11,687
|
Long-term
debt
|
Operating
leases
|
Licensing
agreements
|
Total
|
|||||||||||||
No later than one year
|
$
|
2,579
|
$
|
3,132
|
$
|
1,754
|
$
|
7,465
|
||||||||
Later than one year and no later than five years
|
3,774
|
7,056
|
2,123
|
12,953
|
||||||||||||
Later than five years
|
102
|
93
|
–
|
195
|
||||||||||||
$
|
6,455
|
$
|
10,281
|
$
|
3,877
|
$
|
20,613
|
Expiry dates
|
Contractual
amounts
|
Weighted average
contractual
forward rates
|
||||||
June 2019 to August 2019
|
$
|
8,700,000
|
1.2984
|
|||||
September 2019 to August 2020
|
33,600,000
|
1.3001
|
||||||
September 2020 to August 2021
|
15,300,000
|
1.3067
|
||||||
September 2021 to April 2022
|
4,500,000
|
1.3208
|
||||||
Total
|
$
|
62,100,000
|
1.3030
|
Expiry dates
|
Contractual
amounts
|
Weighted average contractual
forward rates
|
||||||
June 2019 to August 2019
|
$
|
600,000
|
74.31
|
|||||
September 2019 to May 2020
|
$
|
1,200,000
|
72.00
|
|||||
Total
|
$
|
1,800,000
|
72.77
|
As reported
as at
August 31, 2018
|
Adjustments
|
As adjusted
as at
September 1, 2018
|
||||||||||
Accounts receivable – Trade
|
$
|
47,273
|
$
|
(303
|
)
|
$
|
46,970
|
|||||
Income taxes recoverable
|
$
|
4,790
|
$
|
50
|
$
|
4,840
|
||||||
Total assets
|
$
|
284,544
|
$
|
(253
|
)
|
$
|
284,291
|
|||||
Retained earnings
|
$
|
114,906
|
$
|
(253
|
)
|
$
|
114,653
|
|||||
Shareholders’ equity
|
$
|
177,921
|
$
|
(253
|
)
|
$
|
177,668
|
Financial assets
|
Classification – IAS 39
|
Classification – IFRS 9
|
Cash
|
Loans and receivables
|
Amortized cost
|
Short-term investments
|
Available for sale
|
Fair value through other comprehensive income
|
Accounts receivable
|
Loans and receivables
|
Amortized cost
|
Other assets
|
Loans and receivables
|
Amortized cost
|
Forward exchange contracts
|
Derivatives used for hedging
|
Derivatives used for hedging
|
Bank loan
|
Other financial liabilities
|
Amortized cost
|
Accounts payable and accrued liabilities
|
Other financial liabilities
|
Amortized cost
|
Other liabilities
|
Other financial liabilities
|
Amortized cost
|
Long-term debt
|
Other financial liabilities
|
Amortized cost
|
Forward exchange contracts
|
Derivatives used for hedging
|
Derivatives used for hedging
|
Three months
ended
May 31, 2019
|
Three months
ended
May 31, 2018
|
Nine months
ended
May 31, 2019
|
Nine months
ended
May 31, 2018
|
|||||||||||||
IFRS net earnings (loss) attributable to the parent interest for the period
|
$
|
21
|
$
|
(5,970
|
)
|
$
|
(2,253
|
)
|
$
|
(7,951
|
)
|
|||||
Add (deduct):
|
||||||||||||||||
Depreciation of property, plant and equipment
|
1,368
|
1,555
|
4,187
|
3,972
|
||||||||||||
Amortization of intangible assets
|
2,072
|
4,210
|
7,142
|
8,385
|
||||||||||||
Interest and other (income) expense
|
698
|
198
|
(439
|
)
|
870
|
|||||||||||
Income taxes
|
3,385
|
1,363
|
4,586
|
5,424
|
||||||||||||
Stock-based compensation costs
|
475
|
440
|
1,354
|
1,280
|
||||||||||||
Restructuring charges (reversals)
|
(13
|
)
|
–
|
3,305
|
–
|
|||||||||||
Change in fair value of cash contingent consideration
|
–
|
–
|
–
|
(716
|
)
|
|||||||||||
Acquisition-related deferred revenue fair value adjustment
|
–
|
913
|
1,435
|
1,222
|
||||||||||||
Foreign exchange (gain) loss
|
(146
|
)
|
(160
|
)
|
55
|
(1,386
|
)
|
|||||||||
Adjusted EBITDA for the period (1)
|
$
|
7,860
|
$
|
2,549
|
$
|
19,372
|
$
|
11,100
|
||||||||
Adjusted EBITDA as a percentage of sales
|
10.7
|
%
|
3.5
|
%
|
8.9
|
%
|
5.5
|
%
|
(1)
|
Includes acquisition-related costs of $2.1 million for the nine months ended May 31, 2018 (nil in fiscal 2019).
|
Quarters ended
|
||||||||||||||||
May 31,
2019
|
February 28,
2019
|
November 30,
2018
|
August 31,
2018
|
|||||||||||||
Sales
|
$
|
73,587
|
$
|
73,927
|
$
|
69,201
|
$
|
69,216
|
||||||||
Cost of sales (2)
|
$
|
30,458
|
$
|
29,062
|
$
|
28,897
|
$
|
27,426
|
||||||||
Net earnings (loss)
|
$
|
21
|
$
|
5,193
|
$
|
(7,467
|
)
|
$
|
(3,951
|
)
|
||||||
Basic and diluted net earnings (loss) per share
|
$
|
0.00
|
$
|
0.09
|
$
|
(0.14
|
)
|
$
|
(0.07
|
)
|
Quarters ended
|
||||||||||||||||
May 31,
2018
|
February 28,
2018
|
November 30,
2017
|
August 31,
2017
|
|||||||||||||
Sales
|
$
|
72,217
|
$
|
64,722
|
$
|
63,391
|
$
|
62,981
|
||||||||
Cost of sales (2)
|
$
|
28,963
|
$
|
25,326
|
$
|
23,289
|
$
|
23,972
|
||||||||
Net earnings (loss) attributable to the parent interest
|
$
|
(5,970
|
)
|
$
|
(4,660
|
)
|
$
|
2,679
|
$
|
844
|
||||||
Basic and diluted net earnings (loss) attributable to the parent interest per share
|
$
|
(0.11
|
)
|
$
|
(0.08
|
)
|
$
|
0.05
|
$
|
0.02
|
(1)
|
Quarterly financial information has been derived from our condensed unaudited interim consolidated financial statements, which are
prepared in accordance with IFRS, as issued by the IASB, applicable to the preparation of interim financial statements, including IAS 34, “Interim Financial Reporting”. The presentation currency
is the US dollar, which differs from the functional currency of the company (Canadian dollar).
|
(2)
|
The cost of sales is exclusive of depreciation and amortization.
|
Quarters ended
|
||||||||||||||||||||
August 31,
2018
|
May 31,
2018
|
February 28,
2018
|
November 30,
2017
|
Total
|
||||||||||||||||
Test and measurement
|
$
|
47,489
|
$
|
49,864
|
$
|
49,884
|
$
|
50,186
|
$
|
197,423
|
||||||||||
Service assurance, systems and services
|
21,649
|
22,174
|
14,457
|
12,968
|
71,248
|
|||||||||||||||
Foreign exchange gains on forward exchange contracts
|
78
|
179
|
381
|
237
|
875
|
|||||||||||||||
Total sales
|
$
|
69,216
|
$
|
72,217
|
$
|
64,722
|
$
|
63,391
|
$
|
269,546
|
1. |
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”)
of EXFO Inc. (the “issuer”) for the interim period ended May 31, 2019.
|
2. |
No misrepresentation: Based on my knowledge, having exercised reasonable diligence, the interim filings do
not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the
period covered by the interim filings.
|
3. |
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial
report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods
presented in the interim filings.
|
4. |
Responsibility: The issuer's other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in Regulation 52-109 respecting Certification of Disclosure in Issuer’s Annual and Interim Filings
(c. V-1.1, r. 27), for the issuer.
|
5. |
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other
certifying officer and I have, as at the end of the period covered by the interim filings
|
(a) |
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
(i) |
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
(ii) |
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is
recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
(b) |
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with the issuer's GAAP.
|
5.1 |
Control framework: The control framework the issuer's other certifying officer and I used to design the
issuer's ICFR is the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2 |
N/A
|
5.3 |
N/A
|
6. |
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR
that occurred during the period beginning on March 1, 2019 and ended on May 31, 2019 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
|
1. |
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim
filings”) of EXFO Inc. (the “issuer”) for the interim period ended May 31, 2019.
|
2. |
No misrepresentation: Based on my knowledge, having exercised reasonable diligence, the interim filings
do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to
the period covered by the interim filings.
|
3. |
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial
report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the
periods presented in the interim filings.
|
4. |
Responsibility: The issuer's other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in Regulation 52-109 respecting Certification of Disclosure in Issuer’s Annual and Interim Filings
(c. V-1.1, r. 27), for the issuer.
|
5. |
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other
certifying officer and I have, as at the end of the period covered by the interim filings
|
(a) |
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
(i) |
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
(ii) |
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is
recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
(b) |
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with the issuer's GAAP
|
5.1 |
Control framework: The control framework the issuer's other certifying officer and I used to design the
issuer's ICFR is the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2 |
N/A
|
5.3 |
N/A
|
6. |
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's
ICFR that occurred during the period beginning on March 1, 2019 and ended on May 31, 2019 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
|